A Short Note on Brexit: Telecommunications Issues after the Referendum

22 Pages Posted: 3 Jul 2016

See all articles by Ewan Sutherland

Ewan Sutherland

University of the Witwatersrand, LINK Centre

Date Written: June 30, 2016

Abstract

In a referendum on 23rd June 2016, the United Kingdom (UK) voted for ‘Brexit’, i.e., to leave the European Union (EU).

After some delay the government will invoke Article 50 TEU, which would begin a two-year period of negotiation for a withdrawal agreement, after which the EU treaties would no longer apply. The ‘Norway Option’ would result in signing the European Economic Area (EEA) Treaty, re-imposing most of the obligations and costs of EU membership, while removing almost all democratic mechanisms, but ensuring access to the single market. The ‘Albania Option’ would fall back on World Trade Organisation commitments, allowing the government considerable freedom to develop new policies and laws, but with limited access to the single market. The ‘Switzerland Option’ lies between the two.

The effects for telecommunications markets, legislation and policies are potentially considerable, but depend on how the government uses the freedom from no longer being bound by the EU acquis. While it might be innovative, it is unclear in which direction this might go, nor is it obvious where the benefits might lie.

Withdrawal creates a number of legislative holes, with innumerable references to EU institutions and to its objectives (e.g., completion of the single market), which would need to be filled. Some legislation (e.g., state aid rules and the list of markets subject to ex ante regulation) would disappear, potentially requiring ‘transposition’ into domestic law. With these go significant risks of litigation, a well-known problem in the sector.

While ministers have promised that rates for international mobile roaming would not rise, operators would almost certainly lose access to the regulated wholesale rates in the EU-27. Indeed, there would be strong commercial incentives on both sides to raise wholesale rates for those roaming from the United Kingdom to the EU and vice versa. While the operators might try to negotiate alternative deals, there seem only limited chances of success.

The repatriation of policy-making and legislative scrutiny from the EU institutions would require ‘beefing up’ of governmental and parliamentary capabilities. It would also require a much deeper engagement with business users and consumer groups, not least to counter the expert lobbying of the operators. Additionally, it would be important to boost the provision of independent views, both from academic researchers and think tanks. Without a rich debate on policies for telecommunications, any potential benefits of Brexit could easily be lost, with the greatest risk being in a mishandled transition.

Scotland is “highly likely” to have a second plebiscite, potentially becoming independent, perhaps inside the EU or left outside. In any event, it would need a ministry, regulatory authority, system of appeals and parliamentary oversight, for which no plans exist.

Keywords: European Union, United Kingdom, Telecommunications Policy, Article 50 TEU

JEL Classification: D43, D44, D45, D63, D73, D72, D78, H1, H54, K21, K23, L12, L13, L41, L44, L52, L96, O38

Suggested Citation

Sutherland, Ewan, A Short Note on Brexit: Telecommunications Issues after the Referendum (June 30, 2016). Available at SSRN: https://ssrn.com/abstract=2802916 or http://dx.doi.org/10.2139/ssrn.2802916

Ewan Sutherland (Contact Author)

University of the Witwatersrand, LINK Centre ( email )

1 Jan Smuts Avenue
Wits
Johannesburg, Gauteng 2000
South Africa

HOME PAGE: http://link.wits.ac.za/

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
136
Abstract Views
1,274
Rank
381,245
PlumX Metrics